Craigslist Awarded $31 Million Judgment Against CAN-SPAM Violator

Online classifieds site Craigslist has obtained a $31 million judgment against the online used car retailer Instamotor, which allegedly scraped data from the site and sent thousands of email ads to Craigslist's users.

Instamotor stipulated to the judgment, which was signed late last week by U.S. District Court Judge Maxine Chesney in San Francisco. The company also agreed to permanently destroy all data collected from Craigslist, and to refrain from scraping the site in the future.

The move ends a lawsuit brought by Craigslist in April, when it alleged that Instamotor "sought to unlawfully piggyback on craigslist’s decades of hard work by stealing craigslist users’ posts and contact information, harassing those users with unsolicited text and email messages advertising Instamotor’s services, and reposting the harvested craigslist listings on the Instamotor site and/or app."

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Craigslist contended that Instamotor violated the federal CAN-SPAM Act for several reasons, including that its emails failed to state they were ads, and contained misleading information in the subject line. Craigslist also said Instamotor violated Craigslist's terms of service by scraping the site and misappropriating the information.

Craigslist alleged that Instamotor's messages touted its own car-selling service. One example provided by Craigslist in its court papers included the following language: "Hello! It’s Lizanne from Instamotor. We are a FREE app to buy/sell cars safely. ... Our app features tools like privacy shield!"

The stipulation agreement states that Instamotor "harvested craigslist users’ contact information from the craigslist website and initiated many thousands of electronic mail messages."

The agreement adds that Instamotor "failed to clearly and conspicuously identify that the messages were advertisements or solicitations for Instamotor’s services, did not contain clear and conspicuous notice of the opportunity to decline to receive further commercial electronic mail messages from the sender (i.e., an unsubscribe button), and did not provide a physical postal address of the sender."

The deal calls for Instamotor to pay around $25.7 million for CAN-SPAM violations -- or $300 for each of 85,581 emails -- and $5.3 million for violating Craigslist's terms of service.

In April, U.S. District Court Judge Charles Breyer in the Northern District of California awarded Craigslist a $60 million judgment against former online rental services company RadPad, which allegedly misappropriated Craigslist's real estate listings, engaged in computer fraud and spammed the site's users. RadPad had gone out of business at the time Breyer entered judgment.

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